Despite the hype around RPA and AI technologies leading to the death of BPO and offshore delivery, quite the contrary is the case. The introduction of RPA, and subsequently new digital process models, is leading not just to reinvention of services within existing BPO contracts but to increased penetration of the retained and shared services operations within organizations.

At the same time, approximately 80% of RPA & AI-related business process transformation services are delivered from offshore

The emergence of these new technologies is supporting considerable revenue growth that is particularly marked in those pure-play BPO vendors with high domain focus, and the digital transformation specialists. Indeed, the services market related to RPA & AI-based business process transformation is forecast to grow from $701m in 2017 to $8,130m by 2022, a compound annual average growth rate of 63%, with high double-digit growth forecast across geographies.

In terms of market evolution:

RPA is currently at the growth stage, with organizations now looking to scale across the organization

Organizations now face the immediate roadblock in their automation journeys of handling classification of documents and processing of unstructured data

New digital process models addressing process reimagination and end-to-end straight-through processing are emerging, but in their infancy, with adoption most advanced in the travel sector, followed by healthcare and P&C insurance.

Over the next four years:

Standalone RPA implementation activity will decrease, with RPA still critical but becoming the execution mechanism embedded within new digital process models

There will be a major shift towards reimagination of business processes

Technologies used will move beyond RPA and ML to additionally encompass BPM, SaaS platforms, analytics, DL and new digital technologies such as IoT and blockchain

External information sources will increasingly be used to supplement cognitive decision-making

Voice, image, and video processing will become key elements in handling unstructured data

The principal benefits sought from new business process models will be enhanced customer/user experience together with "minimal touch" straight through processing

Design thinking for reimagination and UX consultancy will continue to increase in importance

Domain skills will become dominant in the market for new digital process models

The ability to develop a concentration of new digital process models within a domain will determine the future market leaders in that domain for business process transformation.

NelsonHall is the leading global analyst firm dedicated to helping organizations understand the 'art of the possible' in next generation IT and business services. With analysts in the US, UK, and Europe, NelsonHall provides buy-side organizations with detailed, critical information on markets and vendors (including NEAT assessments) that helps them make fast and highly informed sourcing decisions. For service providers, NelsonHall provides deep knowledge of market dynamics and user requirements to help them hone their go-to-market strategies.